The Kilfinan Property Company Limited - Limited company accounts 20.1

REGISTERED NUMBER: SC488972 (Scotland)

THE KILFINAN PROPERTY COMPANY LIMITED

REPORT OF THE DIRECTOR AND

UNAUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

Page

Company Information

1

Report of the Director

2

Statement of Income and Retained Earnings

3

Balance Sheet

4

to

5

Notes to the Financial Statements

6

to

13

DIRECTOR:

R G T Stenhouse

SECRETARY:

A M T Stenhouse

REGISTERED OFFICE:

37 Hill Street North Lane

Edinburgh

EH2 3LQ

REGISTERED NUMBER:

SC488972 (Scotland)

ACCOUNTANTS:

Milne Craig

Chartered Accountants

Abercorn House

79 Renfrew Road

Paisley

Renfrewshire

PA3 4DA

The director presents his report with the financial statements of the company for the year ended 31 March 2021.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of property investment.

DIRECTOR

R G T Stenhouse held office during the whole of the period from 1 April 2020 to the date of this report.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

R G T Stenhouse - Director

3 December 2021

TURNOVER

21,830

46,446

Cost of sales

(7,501

)

(15,538

)

GROSS PROFIT

14,329

30,908

Administrative expenses

(17,447

)

(86,966

)

OPERATING LOSS and

LOSS BEFORE TAXATION

(3,118

)

(56,058

)

Tax on loss

5

-

(2,806

)

LOSS FOR THE FINANCIAL YEAR

(3,118

)

(58,864

)

Retained earnings at beginning of year

87,708

146,572

RETAINED EARNINGS AT END OF YEAR

84,590

87,708

FIXED ASSETS

Tangible assets

6

360

800

Investment property

7

1,505,900

1,505,900

1,506,260

1,506,700

CURRENT ASSETS

Debtors

8

3,357

275,091

Cash in hand

100

100

3,457

275,191

CREDITORS

Amounts falling due within one year

9

1,423,919

1,692,975

NET CURRENT LIABILITIES

(1,420,462

)

(1,417,784

)

TOTAL ASSETS LESS CURRENT LIABILITIES

85,798

88,916

PROVISIONS FOR LIABILITIES

12

208

208

NET ASSETS

85,590

88,708

CAPITAL AND RESERVES

Called up share capital

13

1,000

1,000

Retained earnings

84,590

87,708

SHAREHOLDERS' FUNDS

85,590

88,708

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 March 2021.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 March 2021 in accordance with Section 476 of the Companies Act 2006.

The director acknowledges his responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the director and authorised for issue on 3 December 2021 and were signed by:

R G T Stenhouse - Director

1.	STATUTORY INFORMATION

The Kilfinan Property Company Limited is a private company, limited by shares , registered in Scotland. The company's registered number and registered office address can be found on the Company Information page.

The nature of the Company's operations and its principal activities are set out in the Directors Report on page 2.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

The company made a loss before tax of £3,118 (2020: £56,058), has a net current liability position at the year end of £1,460,462 (2020: £1,415,008) and total net assets of £85,590 (2020: £91,456). The directors of Shancastle Investments Limited, being the company's parent entity, have confirmed the continued financial support of the company for a period of at least 12 months from the date these financial statements were approved. Accordingly, the directors consider it is appropriate to prepare the financial statements on a going concern basis.

Critical accounting judgements and key sources of estimation uncertainty

In preparing these financial statements, the directors have made the following judgements:

Investment properties are valued based on market value and are considered annually. The company considers the property market prices and market rental values when valuing their investment property, however, there is an inevitable degree of judgement involved in that each property is unique and their value can ultimately only be reliably tested in the market itself.

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Assets are considered for indications of impairment. If required an impairment review will be carried out and a decision made on possible impairment. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

Bad debts are provided for where objective evidence of the need for a provision exists.

Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable.

Revenue comprises income from property lets. Income from property lets is recognised over the period of the rental agreement on a straight line basis.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Fixtures and fittings - 20% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Investment property

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Investment properties are recognised initially at cost.

Subsequent to initial recognition

i. investment properties whose fair value can be measured reliably without undue cost or effort are held at fair value. Any gains or losses arising from changes in the fair value are recognised in profit or loss in the period that they arise; and

ii. no depreciation is provided in respect of investment properties applying the fair value model.

If a reliable measure is not available without undue cost or effort for an item of investment property, this item is thereafter accounted for as tangible fixed assets in accordance with section 17 until a reliable measure of fair value becomes available.

Financial instruments

The Company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 ' Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transactions costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Taxation

Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated.

Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

If and when all conditions for retaining tax allowances for the cost of a fixed asset have been met, the deferred tax is reversed.

Deferred tax is calculated using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

With the exception of changes arising on the initial recognition of a business combination, the tax expense (income) is presented either in profit or loss, other comprehensive income or equity depending on the transaction that resulted in the tax expense (income).

Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors.

Deferred tax assets and deferred tax liabilities are offset only if the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

Non-financial assets

An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

Financial assets

For financial assets carried at amortised cost, the amount of impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset's carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal.

An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 1 (2020 - 1 ) .

4.	OPERATING LOSS

The operating loss is stated after charging:

2021

2020

£

£

Depreciation - owned assets

440

2,458

5.

TAXATION

Analysis of the tax charge

The tax charge on the loss for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

-

2,776

Adjustments in respect of

prior periods

-

58

Total current tax

-

2,834

Deferred tax

-

(28

)

Tax on loss

-

2,806

6.	TANGIBLE FIXED ASSETS

Fixtures

and

fittings

£

COST

At 1 April 2020

and 31 March 2021

11,802

DEPRECIATION

At 1 April 2020

11,002

Charge for year

440

At 31 March 2021

11,442

NET BOOK VALUE

At 31 March 2021

360

At 31 March 2020

800

7.	INVESTMENT PROPERTY

Total

£

FAIR VALUE

At 1 April 2020

and 31 March 2021

1,505,900

NET BOOK VALUE

At 31 March 2021

1,505,900

At 31 March 2020

1,505,900

Fair value at 31 March 2021 is represented by:

£

Valuation in 2018

48,190

Cost

1,457,710

1,505,900

If the investment properties had not been revalued they would have been included at the following historical cost:

2021

2020

£

£

Cost

1,457,710

1,426,810

Aggregate depreciation

(149,723

)

(120,569

)

The investment properties were valued on an open market basis on 31 March 2018 by Graham & Sibbald, Chartered Surveyors .

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Other debtors

1,367

272,895

Prepayments and accrued income

1,990

2,196

3,357

275,091

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Trade creditors

420

1,104

Amounts owed to group undertakings

1,416,715

1,682,732

Tax

-

2,776

Social security and other taxes

557

-

Accruals and deferred income

6,227

6,363

1,423,919

1,692,975

10.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2021

2020

£

£

Within one year

4,421

4,421

11.	SECURED DEBTS

The following secured debts are included within creditors:

2021

2020

£

£

Amounts owed to group

1,416,715

1,682,732

Shancastle Investments Limited holds a standard security over 3 of the investment properties in respect of the amounts owed to them by the company.

12.	PROVISIONS FOR LIABILITIES

2021

2020

£

£

Deferred tax

208

208

Deferred

tax

£

Balance at 1 April 2020

208

Balance at 31 March 2021

208

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2021

2020

value:

£

£

1,000

Ordinary shares

£1

1,000

1,000

Each share holds equal voting rights of the company and ranks equally in respect of distributions.

14.	ULTIMATE CONTROLLING PARTY

The company is a wholly owned subsidiary of Shancastle Investments Limited (SC034742) which is the ultimate controlling company, incorporated in Scotland. Shancastle Investments Limited and its subsidiaries form a small group which is exempt from preparing consolidated group financial statements.